The Obama administration’s goal for Obamacare signups next year is realistic, but may not be enough to appease insurers worried by the marketplace’s risk pools, experts said.
The administration on Wednesday said it is hoping that 13.8 million people will sign up for Obamacare for the 2017 coverage year, about 1.1 million more than the 12.7 million who signed up for coverage in 2016. Of that 12.7 million, about 10 million have paid for coverage.
The administration is expecting that about 11.4 million people will pay their Obamacare premiums next year.
Several experts said they believe the administration didn’t overreach in making the enrollment estimate.
“I think it is a little bit optimistic, but it is in the realm of possibility,” said Caroline Pearson, senior vice president for healthcare consulting firm Avalere.
A projected increase in ACA marketplace signups of 1 million for 2017 is a goldilocks estimate: not too pessimistic, not too optimistic.
— Larry Levitt (@larry_levitt) October 19, 2016
Policy expert Larry Levitt used a fairy tale analogy to describe the goal.
“A projected increase in [Affordable Care Act] marketplace signups of 1 million for 2017 is a goldilocks estimate: not too pessimistic, not too optimistic,” according to a tweet from Levitt, senior vice president for the nonpartisan Kaiser Family Foundation.
The administration plans for 9.2 million people to re-enroll in Obamacare, 3.5 million uninsured to sign up and another 1.1 million who have 2016 plans off the marketplace.
The administration didn’t elaborate on who in those groups may drop coverage throughout the year.
However, Pearson and Levitt were skeptical that insurers would be appeased even if the administration reaches the signup goal. Obamacare has seen several high-profile defections for next year due to financial losses, including top insurers Aetna and UnitedHealth bolting from a majority of states they offer plans in.
While Levitt said he didn’t believe meeting the enrollment goal would guarantee a “stable market,” any growth in enrollment “would improve the risk pool and signal forward progress to insurers,” he told the Washington Examiner.
“Even modest enrollment growth would quiet fears that the marketplace is collapsing,” Levitt said. “I would think that would be enough to keep insurers participating as policymakers discuss potential improvements to the ACA.”
Insurers are also raising premiums this year in an attempt to correct largely underpriced plans when the marketplace went online in 2014. A recent study from the Commonwealth Fund found that a majority of Obamacare insurers didn’t turn a profit in 2014.
Some states are raising premiums by 50 percent or more, including Tennessee and Arizona. An independent estimate from the website acasignups.net projects that 41 states will raise Obamacare rates by an average of 25 percent, although that total includes individual plans sold off the exchange.
Levitt said that while premium increases are a problem currently, they will “put insurers on much more solid financial footing next year.”
However, Obamacare’s enrollment goal is still “dramatically lower than what policymakers expected when they passed the [Affordable Care Act],” Pearson said. “That still means that most of the people on the exchanges are going to be relatively high-risk, high-need individuals which means we still need to be concerned about market stability.”
Pearson said the exchanges are popular among lower-income people who can get subsidies to pay down the cost of insurance.
“As income increases, you steadily lose participation,” she said.
A major reason is cost, as some people with higher incomes can’t afford to pay premiums and deductibles, Pearson added.
“The subsidies and [individual mandate] penalties aren’t high enough to compel those people to buy,” she said.
